Business Journal: Foreclosures Hurt Housing Market
Banks are foreclosing on more homes and that’s creating a major problem for California’s housing market.
Tuesday, May 13, 2008
More than 1,000 foreclosed homes were auctioned last month – and that was still not enough to keep up with the pace of homes being taken back by banks and mortgage companies in California. In fact, lenders added about 1.4 foreclosed homes for every home auctioned in April, according to ForeclosureRadar, an auction tracking company. Last month, lenders sent out a record 44,100 notices of default statewide, that’s the first step in the foreclosure process and a sign that the housing market trouble will continue through at least the summer. The average foreclosed home was purchased at a 25 percent discount in April, and almost half were sold for 30 percent less than the existing loan balance on the property. About one of every 55 homes in the Sacramento region received a foreclosure filing during the first quarter, that’s the fifth-highest rate in the nation.